Billerica pension costs high, but officials say they're under control

BILLERICA -- More taxpayer money will be devoted to paying pensions for retired workers in the town's 2014 budget than it will for the police or fire departments.

The $8.1 million in pension costs is nearly six times the amount Billerica spends annually on its library, 12 times the veterans services budget, and 22 times the amount Billerica spends on its Recreation Department.

Only one-fifth of the pension total pays so-called "real costs" -- this year's expenses -- for the 415 retirees being paid pensions.

The rest, more than $6.4 million, goes toward paying down the liability of more than $113 million, which Billerica officials plan to have paid off in 22 years.

The numbers might seem staggering, but Billerica officials say the town's in a solid financial position to pay off the liability.

"We're on track. The increases have been in line of what we've expected," said Town Accountant Paul Watson. "We've been able to handle it.

"As long as it can remain what we expect, we're good," he added. "I don't really worry about the pensions so much because we're on track."

As part of statewide pension reforms, municipal employees pay into the system slightly more than they did decades ago. A municipal worker hired before 1975, for instance, would contribute only 5 percent. Today, a worker pays 9 percent, plus an additional 2 percent for pay above $30,000.

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The fiscal 2014 payment for Billerica is $8,153,848, an increase of 0.8 percent, or about $68,000, in one year. This is a significant improvement from fiscal 2011 to 2012 when the pension payment spiked 10 percent, or $682,000.

Next year's increase is projected to be almost 7 percent, or $553,000, according to information from the Middlesex County Retirement Board.

Despite the high numbers each year, Selectmen Chairman Dave Gagliardi said it's inaccurate to conclude that funds dedicated to pension liabilities take away from other areas in town.

"This has been worked into the budget for a long, long time," he said. "These were negotiated contracts made to people for years, and we don't go back on those promises. You can't say anything was put off because of the pensions. You just can't single that out."

The town is meeting its requirements to fund the liability in accordance with state law, Watson said.

Some former workers are receiving annual pensions of close to six figures or more in retirement.

The highest, former Police Chief Paul Matthews, takes home $105,227 each year, according to the Middlesex County Retirement Board. Anthony Capaldo Jr., a former fire chief, is the second highest at $95,997. They are among 65 former Billerica employees or survivors receiving annual pension payments greater than $50,000 ($4,166.66 monthly).

The median benefit amount for the 415 benefit recipients in Billerica is $19,246.

On the school side, there are 238 retirees receiving pensions of $50,000 or more. Leading the pack is former Superintendent Anthony Serio's $125,712 annual pension. The second highest is Francis Antonelli, a former assistant superintendent, with a $96,415 pension.

In addition to the more than $8 million that goes toward municipal and some school workers, more than twice as much goes toward teachers, principals and other administrators. Almost $20 million goes toward paying 396 teachers, principals and administrators -- but that cost is borne by all Massachusetts taxpayers as part of the Massachusetts Teachers' Retirement System.

Teachers and those who pay into the Massachusetts Teachers' Retirement System -- which also includes superintendents, other administrators and principals -- contribute 11 percent into their pension plan. Like with municipal workers, that is also more than they used to pay before 2001, when they contributed between 5 percent and 9 percent, varying amounts that increased as time went along.

"Luckily, we haven't heard of any talk of cutting benefits or raising rates," said Sam Rippin, assistant superintendent of finance and operations in Billerica. "But we'll take it one year at a time."

The liability for the Massachusetts Teachers' Retirement System does not come from local school districts. Instead, taxpayers across Massachusetts cover the system's cost. The program, which has 105 contributing school districts, covers retirement, disability and survivor benefits for 88,000 current employees and 59,000 retirees.

Many school workers, including those in food service or paraprofessionals, are covered in the town's pension plan, not the Massachusetts Teachers' Retirement System.

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Top recipients, annual pensions

MUNICIPAL

Former Police Chief Paul Matthews: $105,227

Former Fire Chief Anthony Capaldo Jr.: $95,997

Former Deputy Police Chief Thomas Conners: $95,640

Former Police Lt. Richard Strunk: $88,093

Former Police Capt. Stephen West: $80,721

SCHOOL

Former Superintendent Anthony Serio: $125,712

Former Assistant Superintendent Francis Antonelli: $96,415

Former Dutile School Principal Patricia Tobin: $93,091

Former Superintendent Jerry Houghton: $83,746

Former Parker School Principal Mary Wittenhagen: $82,161

Billerica's total pension liability: $113,457,186

Fiscal 2014 payment: $8,153,848

Of this year's payment, amount that pays this year's benefits: $1,665,883

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